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`Committee to Save the Dollar' May Not Be Needed: William Pesek
William Pesek
Bloomberg
Friday, Aug 29, 2008
So, the dollar isn't on its own.
That's the upshot of a Nikkei newspaper scoop yesterday that
European, Japanese and U.S. officials in mid-March drew up plans
to strengthen the U.S. currency following troubles at Bear Stearns
Cos. Assuming the report is correct, such an effort might be dubbed
``The Committee to Save the Dollar.''
It would be the currency-market equivalent of the ``The Committee
to Save the World.'' That term was coined in February 1999 by
Time magazine when it splashed Alan Greenspan, Robert Rubin and
Lawrence Summers on its cover. Time credited them with ending
a global crisis that began in Thailand in July 1997.
Thailand, of course, is again in a state of chaos. Yet the eyes
of the world haven't been on the Thai baht this year, but a dollar
seemingly in freefall. In July, the dollar declined to $1.6038
per euro, the lowest since the euro's inception in 1999.
(Article continues below)
That was then. The euro is down 9 percent versus the dollar since
mid-July, making any meetings of the Committee to Save the Dollar,
or global moves to intervene in markets, less necessary.
``The risk would appear to have diminished as markets have come
to realize that Europe's economy is weakening,'' says Paul Donovan,
deputy head of global economics at UBS AG in London.
Japan's is slowing, too. The world's second-largest economy contracted
an annualized 2.4 percent last quarter, raising the chances of
a recession. Weakening growth also increases the odds the Bank
of Japan will cut its 0.5 percent benchmark rate.
Why Now?
The dollar isn't doing better because the U.S. outlook is brightening.
Rather, economies -- such as Japan's and those in the euro area
-- that were forecast to hold their ground are losing pace. The
Federal Reserve, meanwhile, isn't expected to cut rates with the
U.S. consumer-price index up 5.6 percent for the 12 months ended
in July.
Full
article here
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INFOWARS:
BECAUSE THERE'S A WAR ON FOR YOUR MIND
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